Providers fire back in court over state's Medicaid backlog

The lawsuits were filed by 7 operators on behalf of hundreds of individual residents whose applications are in limbo

Editors' Note: This story has been modified to note that Evangelical Lutheran Good Samaritan Society is involved in a similar case elsewhere but not in this particular Illinois lawsuit.

Seven long-term care operators are suing the Illinois Department of Healthcare and Family Services over the state's backlog of approximately 7,000 Medicaid applications, a law firm representing the providers announced Wednesday.

The Illinois lawsuits, filed in October and November, claim Illinois' failure to use an electronic verification system for Medicaid applications is partly to blame for the backlog. That's despite a law passed in 2008 that requires states to implement such a system, known as an electronic asset verification program, or AVP.

The providers that brought the suits own and manage 162 long-term care facilities between them, according to sb2 Inc., the law firm that filed the complaints. The suits were filed on behalf of hundreds of residents.

"Not only did the state in this case not try to obtain resident information through AVP, they also did not try to access this information through secondary sources,” said Chad Bogar, managing partner and CEO of sb2. “The result is a serious backlog that is impacting facilities' ability to care for their residents."

Bogar is involved with similar litigation elsewhere. He has called the backlogs “a nationwide issue — from Maryland to Alabama to … Texas.”

The Illinois suits claim that the state's backlog of pending applications is negatively impacting nursing home residents who require Medicaid eligibility to pay for their care, as well as providers who rely on the federal funds. The complaints seek declaratory and equitable relief from the state.

Federal law states that states have 45 days to process Medicaid applications, but many in Illinois have been delayed more than a year, Bogar said.

“This means that residents are at risk of losing their ability to stay at a facility and receive care,” Bogar said. “It's also putting an unnecessary financial burden on the facilities that are trying to maintain a high quality of care for these residents."

A spokesman with the Department of Healthcare and Family Services told McKnight's the agency does not comment on ongoing litigation.

A similar lawsuit was filed by the Evangelical Lutheran Good Samaritan Society against the state of Kansas in October. Kansas' Medicaid backlog peaked at nearly 10,000 applications this past summer.